Bill to protect assisted living residents from eviction signed into law

Tony Kurdzuk/The Star-LedgerView from above the Senate Chamber dais in this January 2010 file photo.

TRENTON — Legislation Assembly Democrats Valerie Vainieri Huttle, Celeste M. Riley, Matthew W. Milam and Nelson T. Albano sponsored to require assisted living facilities that are closing – despite having contractually agreed to serve Medicaid-eligible residents – to set up escrow funds to pay for these individuals’ care in alternate assisted living facilities has been signed into law.

“We will not allow families who have poured tens- or hundreds-of-thousands of dollars into these assisted living facilities to suddenly find their loved ones homeless because it’s slightly more profitable for the facilities to close than to accept Medicaid payments,” said Vainieri Huttle (D-Bergen). “Plain and simple, this bill would prevent that from happening.”

“What certain assisted living facilities are doing amounts to nothing more than a classic bait and switch,” said Riley (D-Cumberland/Gloucester/Salem). “If they think that they’ll somehow be able to get away with it because their targets are senior citizens, they’re sadly mistaken.”

The law stems from a 2009 report by the state Office of the Public Advocate, which documented a series of incidents involving assisted living facilities run by Wisconsin-based Assisted Living Concepts evicting patients who had exhausted their personal finances and were eligible for Medicaid, in favor of new private-pay patients, simply because Medicaid reimbursed less.

Assisted Living Concepts operates eight facilities in the state, largely located in South Jersey — including the Lindsay House in Pennsville Township.

The law (A-3405) will require any assisted living residence that promised to not discharge residents who become Medicaid-eligible — in writing through a contract, resident agreement, condition of licensure or other legal instrument — but subsequently chooses to surrender its license and close, to set aside sufficient funds, in escrow, to pay for care of displaced residents at an alternate assisted living residence for as long as is necessary.

Under the law, facilities seeking to surrender their license will first be required to pay for actuarial services in order to determine how much money to set aside in escrow to continue to support its displaced residents.

In the event of bankruptcy, any money left over after all creditors have been paid will be used, to the extent possible, to cover the cost of alternate assisted living residence for the displaced individuals.

“In plain English, what Assisted Living Concepts was doing to these poor men and women — who worked their whole life to ensure that they could live out their last years in peace and dignity — was tantamount to theft,” said Milam (D-Atlantic/Cape May/Cumberland). “We need to ensure that this will never happen again.”

“No one who relies on the care of others should be able to be evicted if they have the means to pay,” said Albano (D-Atlantic/Cape May/Cumberland). “This was an example of capitalism at its absolute worst and we must do whatever it takes to prevent it from happening in the future.”